Owner of Home Health Agency Sentenced to Five Years in Prison for Structuring $1.8 Million in Cash Withdrawals to Conceal a $4.5 Million Healthcare Fraud Scheme

WASHINGTON—The owner of a home health services company was sentenced to serve five years in prison for his leading role in a conspiracy to structure over $1.8 million in bank withdrawals to conceal a $4.5 million healthcare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy Cruz of the Houston Field Office of the Internal Revenue Service-Criminal Investigation Division (IRS-CI), Special Agent in Charge William Fergus of the Chicago Regional Office of the United States Railroad Retirement Board, Office of Inspector General (RRB-OIG), Special Agent in Charge Mike Fields of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement. U.S. District Judge Sim Lake of the Southern District of Texas imposed the sentence.

On April 16, 2014, Felix Maduka, 59, of Richmond, Texas, pleaded guilty to conspiring to structure more than $1.8 million in cash withdrawals and eight counts of structuring cash withdrawals from bank accounts where his company, Joystar Home Health Services LLC, received fraudulent payments from Medicare. His wife and co-defendant, Stella Maduka, 49, was Joystar’s Director of Nursing. In addition to the structuring charges, she also pleaded guilty to one count of healthcare fraud and one count of making false statements.

According court documents, Felix and Stella Maduka withdrew just under $10,000 in cash from Joystar bank accounts on nearly 300 occasions to avoid the bank’s mandatory reporting requirements of cash transactions involving more than $10,000 in cash. They engaged in this structuring scheme to conceal the monies used to pay illegal kickbacks to recruiters in exchange for referring Medicare beneficiaries to Joystar and to doctors for authorizing home health services that were not medically necessary nor provided. To further conceal the scheme, Felix and Stella Maduka fabricated patient records to support the fraudulent Medicare billing.

The case is being investigated by HHS-OIG, IRS-CI, RRB-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District Texas. The case is being prosecuted by Trial Attorney William S.W. Chang of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kristine Rollinson of the Southern District Texas.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.